Western Real Estate Business | October, 2022
When COVID-19 made its first U.S. appearance, it sparked an unexpected movement in our society that caused a permanent shift in office real estate. Throughout the pandemic, vacancy rates were the primary metric for its impact on the office market. Given the massive expanse that exists between office supply and demand, it would be easy to write off the sector altogether except for its value-add potential. In fact, a true value-add investment strategy can identify a mix of properties that will yield returns easily overlooked by others.
For savvy real estate investors who possess the creativity required to uncover an asset’s hidden value — and the discipline to execute a strategic enhancement program — this strategy will uncover true hidden potential.
Adding value to a commercial real estate property is typically achieved in two ways: 1) repositioning an asset through a change of use or adaptive re-use and 2) adding value through property capital improvements. Some of the most successful executions include shifting a low-end use to a higher or highest use and by bringing outdoor elements indoors– think vertical planter walls, open patios, and atriums alongside office cubicles; a solid focus on renewable energy, and LED lights and HVAC costs powered by the sun…
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